Wema Bank Plc, Nigeria’s oldest surviving indigenous banking brand, on Friday presented its audited financials for the half-year ended June 30, 2019, showing improvements in top and bottom-line as it set to surpass last year’s full-figures across board, besides the need to closely watch expenses and loan loss impairment charges, going forward.
Gross earnings for the period rose by N8.802bn or 27.47% from N32.033bn in the first half of 2018 to N40.838bn; boosted significantly by the N32.892bn interest income for the period, compared to the previous N25.395bn, an increase of N7.507bn or 29.56%. Interest income was boosted by the N28.373bn loans and advances to banks and customers, which rose from N22.818bn; followed by N3.673bn income from investments securities, up from N2.209bn. Interest expenses also climbed N4.689bn or 28.76% up from N16.306bn in 2018 to N20.995bn, mainly driven by the N14.578bn interest paid on customer deposits, up from N13.942bn; followed by the N3.427bn paid on deposits from other banks, a significant rise from N1.863bn; while other borrowed funds attract N2.99bn cost, compared to N500.193m in 2018.
Net interest income therefore improved from N9.089bn to N11.896bn, represented a growth of N2.807bn or 30.88%.
Net impairment loss on financial assets increased to N823.574m from N344.165m; net interest income after impairment charge for credit losses stood at N11.073bn, N2.327bn or 26.62% up from N8.745bn reported in the prior half year.
Net fee and commission income improved from N3.003bn to N3.755bn, the lion’s share of which was the N1.743bn from fee on electronic products, up from N1.325bn; net trading income stood at N3.651bn from N3.298bn, propelled by the N3.564bn income from treasury bills, up from N2.932bn. Other income improved to N457.579m, up from N216.846m.
Other operating expenses rose to N8.375bn from N7.27bn, after AMCON levy jumped by more than 100% from N587.716m in 2018 to N1.489bn.
Operating income therefore stood at N19.015bn, N3.631bn or 23.6% better than the N15.383bn reported in the similar period of 2018.
Personnel expenses rose to N6.628bnfrom N5.003bn; depreciation and amortization inched marginally from N1.294bn to N1.404bn; operating expenses increased from N7.27bn to N8.375bn.
Profit before tax stood at N2.607bn, from N1.814bn; while the rise in income tax expenses from N244.926m to N359.632m, left net profit at N2.248bn, about N678.372m or 36.27% improvement over the previous half-year’s N1.569bn. The net profit, therefore, translated to 11.6 kobo, compared to the previous 8.6 kobo each.